The Novation Strategy That Turned Unsellable Properties into Million-Dollar Months

Many real estate investors avoid hard-to-sell properties. Fayez Jangda built a thriving, multi-million-dollar business by running toward them.

By combining novation with targeted relationship-building, Fayez consistently closes deals that other wholesalers have already written off.

This article will walk you through:

• How novation works in wholesale real estate
• The story of Fayez’s $80,000 first deal
• How he scaled to $1M/month in revenue
• Lessons for applying these strategies yourself

The $80K First Wholesale  Deal That Started It All

In real estate investing, some deals happen in boardrooms. Others happen over coffee. Fayez Jangda’s first major residential wholesale deal happened in a bathroom.

Shortly after moving to Washington, Fayez learned of a wholesaler who had been trying unsuccessfully to sell a property for two months. Without a marketing budget and with no direct connection to the seller, Fayez arranged to attend a dinner with the wholesaler through a mutual acquaintance.

During the evening, he saw an opportunity.

“Your deal is about to expire. Give me two days to sell it. You have nothing to lose.”

The wholesaler agreed. Drawing on more than 25 years of commercial real estate experience in 20 countries, Fayez inspected the property in person, something the original wholesaler had not done.

By walking the neighborhood, he identified two overlooked value points:

• An unfinished basement that could be converted into a living space
• A garage with alley access that could be developed

Within 24 hours, Fayez secured a buyer willing to pay a $50,000 assignment fee. Advising the wholesaler to renegotiate with the seller resulted in a price reduction, increasing the total fee to $80,000, all on his very first residential wholesale deal.

Watch Fayez Jangda share his full wholesale real estate journey, from his bold bathroom pitch to building a $1M/month business with novation strategies.

From One Deal to a Wholesale Business Model

Rather than chasing the same motivated sellers as everyone else, Fayez focused on the unsellable properties that had already been passed over by other investors.

His formula was simple but powerful:

1. Build relationships with other wholesalers.
2. Offer to take on their hardest-to-sell deals.
3. Personally market those properties to targeted buyers.

Instead of sending generic email blasts, Fayez identified who opened his emails and called them directly. This one-on-one approach regularly resulted in closing deals within 48 hours.

Over time, he became the go-to contact for other wholesalers in his market. As trust grew, they began offering him not just the hard deals, but their most promising opportunities. This joint venture model soon generated $100,000 a month in assignment fees.

The Market Shift That Made Novation Essential

By 2022, the U.S. real estate market had shifted. Sellers were able to demand higher prices, making the traditional wholesale formula, often 70% of after-repair value minus renovation costs, increasingly difficult to achieve.

Many deals fell apart when sellers refused to drop their price. Instead of walking away, Fayez turned to novation agreements.

What is novation in real estate?

Novation is a legal agreement that replaces the original contract with a new one. In real estate investing, it allows you to:

• Secure the right to market a property before owning it
• Make improvements or repairs
• Sell it directly to a retail buyer, often through the MLS
• Pay the seller an agreed-upon amount at closing

The result? Investors can access the full retail buyer pool instead of being limited to cash buyers and investors.

For Fayez, novation transformed his business:

• Average assignment fees jumped from $28,000 to $71,000
• Sellers received more competitive offers
• Properties reached more buyers through MLS listings managed by partner agents

Implementing Novation: Lessons from the First Deal

Fayez’s first novation deal was not easy. It took six months to close and required adapting to:

• Retail buyer inspections and appraisals
• Financing contingencies
• Coordinating with real estate agents and escrow companies

But the payoff was worth it. Once the process was streamlined, novation became a core revenue driver.

Key operational lessons included:

• Partner only with agents experienced in novation to avoid miscommunication with sellers.
• Offer value-added services like moving assistance, cleaning, or staging to win seller trust.
• Conduct a thorough property evaluation before committing to anticipate retail buyer concerns.

Scaling to $1M Monthly in Revenue

With novation in place, Fayez’s business expanded rapidly, reaching $1 million in monthly revenue. Operations spanned 19 states, and the company added multiple profit streams, including:

• Fix-and-flip projects
• Buy-and-hold rental properties
• Airbnb short-term rentals
• A hybrid model where properties were renovated in partnership with sellers

In this hybrid model, the seller remained on title, while Fayez’s team funded and managed renovations. The property was then sold at a higher price, and profits were shared.

The Setback That Changed Strategy

A partnership dissolution required Fayez to rebuild his acquisitions team from scratch under a new brand, Win-Win Homes. Initially, the company continued its multi-state approach, but without the same local connections, results suffered.

Following mentor advice to “go deeper in your backyard,” Fayez refocused entirely on his local market. All deals are now within a one-hour drive, and every seller appointment is conducted in person.

The change rebuilt trust, increased conversion rates, and restored deal flow. In some weeks, Fayez personally signs multiple deals in just a few days.

The Win-Win Culture and Vision

The company’s name, Win-Win Homes, reflects its culture: every deal should benefit the seller, the buyer, and the company.

Team members are encouraged to share their personal goals, and leadership actively supports them. Hitting the $1M/month milestone again would trigger a company-wide celebration, a trip to Cancun for the entire team, including overseas contractors.

Step-by-Step: How to Sell the Unsellable Using Novation

1. Identify properties with potential — Focus on homes that could command higher retail prices with minor improvements.
2. Build seller trust — Explain how novation allows them to get more for their property without extra work or upfront costs.
3. Secure the novation agreement — Ensure legal compliance and clarity on responsibilities.
4. Partner with the right agent — Work with professionals experienced in listing novation properties on the MLS.
5. Manage improvements strategically — Only invest in repairs or staging that directly increases sale value.
6. Market to retail buyers — Leverage MLS exposure, high-quality photography, and open houses.
7. Close and disburse — Pay the seller the agreed amount, retain your profit, and ensure all parties are satisfied.

Lessons for Real Estate Investors

1. Relationships outperform mass marketing
2. Cold email blasts can’t match the conversion power of direct, personal outreach.
3. Look beyond the obvious
4. Features like unfinished basements or garages with alley access can unlock hidden value.
5. Adapt to market shifts
6. When traditional wholesaling no longer works, creative strategies like novation keep deals alive.
7. Go deep, not wide
8. Strong local networks often produce more consistent results than a scattered, multi-state approach.

Novation Strategy and Wholesale FAQ

Q: What is wholesaling?

A: Wholesaling involves securing a property under contract and assigning that contract to another buyer for a profit, without taking ownership.

Q: How does novation differ from wholesaling?

A: Novation replaces the original contract, allowing the investor to market the property to retail buyers, often through the MLS, and potentially earn higher profits.

Q: Is novation legal in all states?

A: Regulations vary. Work with an experienced real estate attorney in your state to structure compliant agreements.

Q: How can I make a property more appealing without major renovations?

A: Simple steps like decluttering, cleaning, staging, and addressing visible repairs can significantly improve marketability.

Q: Can a beginner investor use novation?

A: Yes, but success requires strong relationship-building skills, an understanding of retail buyer expectations, and reliable legal and agent partners.